ICICI OneSource To Acquire FirstRing
The business process outsourcing (BPO) market, specifically the customer-care aspect of it, is gearing up for more consolidation, as ICICI OneSource (I-OneSource) announced its intention today to acquire FirstRing, a Bangalore, India-based customer-care outsourcing company.
FirstRing, one of the earliest companies in the Indian call center outsourcing market (founded in May 1999), has one 650-seat call center located at Information Technology Park Limited (ITPL) in Bangalore, with 800 total employees. The combined company, which will be branded under ICICI OneSource's name, will have more than 3,500 employees and 2,000 seats in four call centers in Mumbai, India, and Bangalore, as well as international business development offices in New York and London.
Under the terms of the agreement ICICI OneSource will acquire FirstRing's India and U.S. operations, as well as the clients and workforce of FirstRing. FirstRing services more than 10 U.S.-based clients. This helps ICICI OneSource increase its U.S.-generated revenue to approximately 40 percent of its overall revenue--a significant increase, considering I-OneSource only had a few U.S. companies prior to the deal, with most customers coming from the United Kingdom, according to Ananda Mukerji, managing director and chief executive at ICICI OneSource.
In addition to its "impressive set of customers in the U.S.," Mukerji says FirstRing is complementary to I-OneSource. "We specialize in inbound customer care and transaction processing. This deal is fairly complementary for us because FirstRing focuses on the outbound side."
Currently I-OneSource generates 70 percent of its revenue from inbound customer care and 30 percent from transaction processing. FirstRing will alter those numbers to 60 percent inbound customer care, 20 percent outbound telemarketing, and 20 percent transaction processing, Mukerji says. He adds by offering an outbound telemarketing component I-OneSource can offer its existing customers more services as well as attract new customers.
According to Gartner, the BPO market, which includes the outsourcing of critical business functions like human resources, IT, finance, payroll, and customer care, the global BPO market is expected to reach $234 billion by 2005. About 30 percent of this business is expected to come from banking, insurance and financial services. I-OneSource focuses on financial services companies.
"We are pleased that ICICI OneSource saw value in the platform, telemarketing expertise, and customer base that FirstRing has built," said K.P. Balaraj, chairman of FirstRing in a statement. "We believe that the brand, scale and balance sheet advantages that ICICI OneSource possesses will result in our clients having the benefit of a platform that can scale rapidly as well as enable them to source an enhanced offering from us. We look forward to working closely with the management team in building ICICI OneSource into a global market leader in the BPO space."
The deal is expected to close in a few weeks, subject to regulatory approval. No layoffs are expected, according to Mukerji.